By 
Cryptocurrency firm Bittrex has reached a settlement of $24 million with the US Securities and Exchange Commission (SEC) to resolve allegations that it operated as an unregistered national securities exchange, broker, and clearing agency.
The company’s former CEO, William Shihara, and its foreign affiliate, Bittrex Global, have also agreed to settle the charges brought by the SEC.
The SEC had accused Bittrex in April of providing services to US investors related to cryptocurrency assets that were classified as securities. The regulator also claimed that Bittrex and Shihara instructed token issuers seeking to list their cryptocurrency assets on the platform to remove certain “problematic statements” from public channels. These statements were considered by Shihara to potentially trigger regulatory scrutiny over whether the crypto assets were being offered and sold as securities.
Gurbir Grewal, Director of the Division of Enforcement at the SEC, stated, “For years, Bittrex worked with token issuers to ‘scrub’ their online statements of any indicia that they were investment contracts—all in an effort to evade the federal securities laws. They failed.”
Prior to the SEC’s charges, Bittrex had already announced its decision to cease operations in the US due to the “current US regulatory and economic environment.”
In May, the company filed for Chapter 11 bankruptcy in a federal court in Delaware, citing over 100,000 creditors and estimated liabilities and assets ranging from $500 million to $1 billion.
Although Bittrex neither admitted nor denied the SEC’s allegations, the settlement involves disgorgement of $14.4 million, pre-judgment interest of $4 million, and a civil penalty of $5.6 million.
Comments